Four Years Ago Wyndham Received the Worst Grade
in NAACP's Annual Lodging Report;
Diversity Priories Now Paying Off

By Suzanne Marta, The Dallas Morning NewsKnight Ridder/Tribune Business News

May
15, 2004 - Wyndham International Inc. chairman Fred J. Kleisner still
remembers his disgust when he learned his hotel chain had received the
worst grade in the industry in the NAACP's annual lodging report.

What
was particularly crushing was how the D had been earned: "It wasn't
even for something we did," Mr. Kleisner said. "We had the arrogance to
refuse to fill out the survey."

But that D grade four years ago
set a new course at Dallas-based Wyndham -- one that made diversity a
priority for how the company does business.

"I decided that we would be the leader in the industry," Mr. Kleisner said.

He met with top managers and told them he wouldn't be associated with a company with a failing grade.

Wyndham
executives analyzed hiring and promotion practices at all levels. Mr.
Kleisner nominated minorities and women to Wyndham's board of directors
as positions opened up. And he asked the board to elevate two female
executives -- including one who is also African-American -- to
corporate officer status. The company examined its supplier contracts
-- increasing participation from women-and minority-owned firms from
almost nothing to 12 percent last year. This year, the goal is 16
percent.

The result: In the three years since the company
launched its minority marketing efforts, revenue from those customers
has grown from $1 million in 2000 to $4 million last year.

Granted,
the $4 million is just a small fraction of the company's revenue. And
Mr. Kleisner reiterates that diversity and gender balance reflect the
heart of the company's effort.

Women business travelers account
for more than 35 percent of Wyndham's revenue -- or about $300 million.
By 2005, that figure is expected to rise to about 50 percent. Women
hold half of all Wyndham's management positions -- up from about 40
percent a few years ago.

Mr.
Kleisner, who has considered himself a civil rights supporter since he
marched in his first demonstration at Michigan State University in the
1960s, said he took the poor rating from the NAACP personally. He has
since met with the executives of the organization and several
minority-targeted publications.

"I asked for their help and
told them that this was what our company would stand for," he said.
"This was not going to be a flavor of the month."

Wyndham
established an external diversity board to help guide how the company
pursues minority customers -- a strategy similar to the one it launched
in 1997 to court women business travelers.

The goal:

To
become the preferred brand for minority, gay and lesbian travelers,
similar to the way it courted women business travelers. As buying power
among minority groups has grown, so has the attention paid by corporate
America. But securing brand loyalty takes more than just making sure
advertising photos aren't limited to white customers.

"If you
want your brand to stand out, you have to be involved in the
community," said Johnnie King, president of The King Group, a
Dallas-based advertising agency that specializes in travel marketing to
ethnic groups.

Once the relationship has been established, those groups also reward with repeat business.

"If
I'm in charge of a big meeting, I'm more likely to go to a company that
has proven they want our business rather than risk a unpleasant
experience with a new company," Mr. King said. "Everything is amplified
when you're dealing with the minority markets."

Wyndham's
efforts seem to be paying off. The company won a contract to host Black
Enterprise magazine's Entrepreneur conference for the next three years.
It's an important event because it attracts around 3,500 of the
nation's most prominent African-American business leaders, who
influence millions in travel spending.

And its Wyndham Palace
Resort & Spa will be the headquarters hotel for next month's "Gay
and Lesbian Day at Walt Disney World" in Orlando, Fla.

The two contracts represent business that previously went to other hotel brands.

In
the latest NAACP rankings, Wyndham was second only to Marriott
International Inc. in the annual report. The grassroots organization
named Mr. Kleisner to chair its corporate giving program. And earlier
this year he was named chairman for the American Hotel and Lodging's
new Multicultural & Diversity Advisory Council.

Company officials credit the efforts for Wyndham's market-share growth during each of the last seven quarters.

"Some
associations and groups started doing business with us because of our
diversity initiatives," said Donna Deberry, Wyndham's executive vice
president of global diversity and corporate affairs. "They wanted to do
business with hotels that shared their values."

Wyndham's
changes to its business operations have also paid off. Many corporate
clients now include questions about the hotel's diversity initiatives
in contract proposals, including make-up of Wyndham's vendors and
workforce and how the company allocates its charitable giving.

"Corporate America sees diversity as a way to figure out who they'll do business with," Ms. Deberry said.

Ms.
Deberry joined Wyndham in 2000, as part of Mr. Kleisner's plan to
aggressively forge relationships with minority groups and attract
business.

It proved to be good timing.

When an economic
downturn began to slow business travel during the spring of 2001,
Wyndham was able to win new group business from minority and emerging
market customers. "We've been able to tap into these customer groups
because we've built relationships in the community," Ms. Deberry said.
"It was the one market that didn't cancel contracts during the
downturn."

Hotel companies can't afford not to market to
minorities and women, said Melinda Bush, chairwoman and chief executive
of New York consulting firm Hospitality Resources Worldwide LLC.

She also serves as a board director for Irving-based FelCor Lodging Trust Inc.

"Competition is on every corner," Mrs. Bush said.

"You
have to look at every market to gain market share. If 40 percent of the
nation's business travelers are women and you're only getting 20
percent, you have to do something different."

Earlier this
year, Wyndham launched its first advertising campaign aimed at gay and
lesbian travelers, a customer segment whose buying power has only
recently been recognized in the tourism industry.

Research by
San Francisco firm Community Marketing Inc. shows that more than 90
percent of gay and lesbian consumers will select what they consider to
be gay-friendly companies to do business with based on its progressive
social policies and practices.

"That's enough to get my attention," Mr. Kleisner said.

-----To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com.